Tuesday, April 03, 2007

Why would Al Gore, America's best-known environmentalist and a member of the board of directors of Apple, oppose shareholder resolutions that ask the computer maker to become more green?

That's what Greenpeace, Friends of the Earth, Consumers Union, the National Environmental Trust and the Computer TakeBack Campaign want to know.

They are among about 70 groups that signed a letter to Gore asking the former vice president to use his clout as a director to get Apple to become responsible for its environmental impact. They charge that Apple (Charts) lags behind rivals Dell (Charts) and Hewlett Packard (Charts) when it comes to recycling computers and eliminating toxic chemicals from its laptops, desktops and other electronic devices.

They say Apple also lags Dell and HP in reporting on environmental and social issues - and that the company is a lot less willing to talk about these issues with activist groups.

Barbara Kyle, the national coordinator of the Computer TakeBack Campaign, who has worked for years with HP and Dell, says: "Apple just won't deal with stakeholders, period. They have a completely different attitude from even Wal-Mart (Charts) at this point. They don't want anyone to tell them anything, and they won't agree to benchmarking of what they are doing."

Is this fair to Apple? How about to Gore, who has been a director of the company since 2003?

The criticisms of Apple strike me, for the most part, as well founded. Its recycling program doesn't measure up to Dell's. Dell will take back, at no charge, any of its electronics, at any time. Apple puts up barriers. It won't take back old Apples unless a customer's buying a new one. The customer has to return the old one within 30 days. You can't bring back your old computers to Apple stores. (They will take back iPods.)

Nor is Apple's program available in Hawaii and Alaska, which might not seem like a big deal unless you live there. Dell and HP also run more local recycling events than does Apple. Dell's got partnerships with Goodwill and other nonprofits to take back its machines. In short - Dell's a leader, Apple's a laggard.

The comparisons over use of toxics aren't as clear cut. Apple is being asked to phase out PVCs and brominated flame retardants. But, as of now, Apple, HP and Dell all use those materials, while they seek alternatives. Apple says it plans to phase them out. HP and Dell say they will do so by 2009. That's not a significant difference, although promises tend to be kept when they are attached to target dates.

But the contrast points to a more significant gap: Apple is not as transparent or accountable as its competitors. HP and Dell publish extensive corporate social responsibility reports, and they invite outside critics to review their progress. Apple provides some useful information on its Web site - you can see for yourself here - but much of it reads more like spin than a candid self-assessment.

As for Gore, he's drawing criticism from the environmentalists because Apple told them that its board voted unanimously against two shareholder resolutions. As You Sow, a nonprofit firm that promotes corporate responsibility on behalf of shareholders, filed a resolution about recycling, asking the company to study the issue. A resolution by Trillium Asset Management, a socially responsible investment firm, asked Apple to look closely at the toxics issue.

Why would Gore vote against them? He declined to respond, through a spokeswoman, but it probably has less to do with the substance of the issues than the sorry state of corporate governance. Even today, very few directors are willing to cast dissenting votes, display independence or publicly criticize management. Gore, you may recall, was also part of an Apple board committee that cleared Steve Jobs of wrongdoing over options backdating, but that's another story.

The more interesting question is, what, if anything, has Gore done behind-the-scenes to press Apple to change? There's no way to know, of course. But we do know that Gore met last spring with the activist groups, including the Computer TakeBack Campaign, and he brought along an Apple exec. (Gore asked everyone to keep the meeting quiet.) That's more than Jobs would do.

Jobs met once with As You Sow because they represent shareholders but, as far as we know, he has never sat down with an environmental group. Most CEOs now understand that they have a lot to gain and nothing to lose by meeting with their critics, but not Jobs.

The other reason to think that Gore could be having an impact is that Apple has made meaningful progress around environmental issues in the last several years. It expanded its recycling efforts. It responded for the first time (albeit incompletely) to the Carbon Disclosure Project, which asks companies to report on their greenhouse gas emissions. It's reducing the size and weight of its computers and its packaging. It adopted a supplier code of conduct in 2005. It reported publicly on a controversy surrounding iPod manufacturing in China.

Conrad MacKerron, director of corporate responsibility for As You Sow, which got Dell going on the recycling issue years ago, says Apple still has a lot of work to do. "For now, Dell seems to be the gold standard," he says. "I'd like to see Apple step up."

[Editor: Greenpeace's campaign focuses on getting Apple to stop using PVC, and using brominated flame retardants (BFRs) in its products. The evidence that these products are toxic per se is not great. However, when waste computers are shipped off to countries like China for "recycling", the parts that are not reusable get burned or dissolved in acid. PVCs produce highly toxic chemicals. BFRs will emit bromine, which is toxic (chemically similar to chlorine). BFRs are supposed to stop plastics fro catching fire under household conditions, but if you're really, really determined to burn them, they will burn, and you'll get a lot of toxic chemicals.

Now, not everyone feels that Greenpeace's criticisms on this particular issue are very well-founded. However, the precautionary principle should be applied. Nothing but good can come out of finding less-toxic alternatives to these chemicals.

In any case, Apple ought to be more responsive to shareholders. Steve Jobs does not handle criticism well, or so we hear, but Apple is not run for the benefit of Steve Jobs alone. And corporations should be responsible to their stakeholders, not just shareholders. It's one dollar, one vote with shareholders. But a corporation's actions affect more than just shareholders. They affect employees, consumers, and others.

Besides that, Apple also should improve its recycling program. That said, consumers also have to take responsibility. We aren't willing to pay for our things to be recycled, and we're too eager to throw stuff away when it's no longer useful. We need a change of attitude as well.